20 Comments on “Gettelfinger On UAW/VEBA Ownership Of Chrysler...”

Well that’s a shame. We radical free-market types have nothing against the union owning and running the company, so long as that isn’t a cue for yet more taxpayer money. In fact, that’s one way of trying to resolve the ridiculous breakdown of relations and trust between labor and management. If the UAW owned and ran the company, perhaps we’d be able to find out which union regulations were hamstringing the company and which weren’t. At least the incentives would be better lined up.

Why is the UAW so eager to put the company in some other sucker’s owner’s hands?

The UAW doesn’t have much of a choice. It’s either gamble it in Fiat’s hands or lose the VEBA money outright in liquidation. In which case, not only will they have a bunch of stiffed retirees, but scads more permanently laid off workers.

Will the entity that is UAW/VEBA have to file bankruptcy if it cant meet the payouts to retirees for benefits, etc? When the Titanic that is UAW/VEBA craters from inevitable financial strain what will the process be to release itself from benefits payments?

If the VEBA is even remotely well managed, I expect a relatively slow and controlled flight into the ground. As the thing becomes more difficult to finance, the health plans will be less gold-plated, the co-pays and such will go up, and the workers will be paying more out-of-pocket or turning to Medicare and such more often.

I assume that since the whole purpose of the VEBA was to get these legacy costs off the automakers’ balance sheets, it will be difficult to tap them for money if/when the VEBA runs out. I also don’t know what kind of appetite the taxpayers will have if the VEBA goes to Congress hat-in-hand.

While there was some sort or argument in favor of Chysler and GM government bailouts, centering around preserving going-concern value and blue-collar jobs in an unusually tough market (and a promise, at least on paper, of recovering what the treasury put in), just throwing money at old folks, who could otherwise just rely on social security, medicare, and their savings (like the rest of us) seems even less palatable. But old folks do vote, so hey, who knows?

Publicly traded automobile companies (like GM and Toyota) have by definition diffuse and transient ownership. That’s the whole point. I don’t see a fundamental problem with the VEBA doing an IPO of New Chrysler to try to raise some money — if the market will bear it. Sure, it could flop, and the VEBA might just run to Congress or Fiat or a hedge fund or somebody and try to get a sort of private sale of equity done (at generous terms, of course). They could, in theory. If and when such a thing is proposed to our government, then (and only then) it’s time to start complaining that “we, the taxpayers” are on the hook again.

What’s all this about stealing cash? The UAW earned every last penny of what they are owed. They’re no less deserving of it than Chrysler’s bondholders who purchased the bonds at pennies on the dollar, bought credit default swaps, and are now trying to force Chrysler into Chapter 7 so they can collect in full. Its possible that a Chrysler C7 could lead to another bailout of AIG.

Ultimately the only real alternative is going to be to nationalize health care in this country. It is just too expensive to do anything else.

The VEBA would be an excellent opportunity to show what a better kind of health care plan could do. Apply basic preventative medicine and universal care like the liberals say should dramatically reduce health care costs, and they’ll be able to keep everyone healthier than the rest of the nation at less cost.

Or they can run it into the ground and then ask the government for a bailout “cuz health care is so expensive!”

Dear UAW,
We regret to inform you that we’ve had a change of heart and we’ve decided to not to purchase any further stake of ownership in Chrysler. We trust that you will find a suitable buyer for your worthless shares so that your organization doesn’t also go bankrupt. We hope there’s no hard feelings.

I was referring to preventing the bankruptcy filing. The only way Obama could have prevented Ch. 11 would have been the commitment to meet ALL of Chryslers obligations every month until they found a way to restore decent cash flow.

He choose not to do that… Now the judge is in charge with heavy dose of input from the government since they are funding the bankruptcy.

I was referring to preventing the bankruptcy filing. The only way Obama could have prevented Ch. 11 would have been the commitment to meet ALL of Chryslers obligations every month until they found a way to restore decent cash flow.

He choose not to do that… Now the judge is in charge with heavy dose of input from the government since they are funding the bankruptcy.

In the narrow sense, you’re probably correct. I still don’t think the taxpayer has seen the last of this mess.